The report, the first in a series, "represents where the industry is now, what the issues and hot issues are, and how VAFI sees the future", Ms Caswell said.

The association aims to work with the State Government and stakeholders to develop a 40-year plan. "By 2025, the industry will be supplying high-quality hardwood timber and wood fibre from native forests, commercial plantations and farm forestry," the report says.

"We aim to have the most sustainable forest practices recognised worldwide. The industry intends to be a significant provider of ecosystems services from forests that include catchment health, salinity control, water flow management, carbon sequestration, linking and expanding remnant forest vegetation and production forests to enhance biodiversity."

The report notes that 651,300 hectares of native forest, less than 10 per cent of Victoria's 7.9 million hectares of native forest, is available to the timber industry.

Mr Gell, a member of VAFI's community council, said he was comfortable with the direction of Victoria's native forest sector.

The industry's first sustainability report was "a very, very valuable document". "It sets a course, marks an intention and it sticks someone's neck out," he said.

But Gavan McFadzean, Victorian campaigns manager for the Wilderness Society, said VAFI's sustainability report was disappointing. "It contains plenty of the usual rhetoric but no new approaches to creating environmental sustainability in native forests," he said.

"Yet again VAFI has a confused understanding of sustainability. This report is about creating sustainability in wood supply, that is native forests can be logged like plantations on 60-year rotations. This is a world apart from environmental sustainability, the outcome of which is that old growth forests … are not destroyed."